Six-month freeze on CSG exploration licences in New South Wales

The New South Wales Government is moving to take the heat out of the issue of coal seam gas (CSG) ahead of next year's election, by announcing a six-month freeze on all new exploration licences.

CSG has been a hot political issue in regional areas and there has been mounting pressure from Nationals MPs for more action from the Government.

The Government has repeatedly tweaked its position on CSG over the past three years in an attempt to neutralise the issue, and says it has listened to community concerns.

It is understood it was preparing to make a major announcement in Question Time this afternoon but the Education Minister Adrian Piccoli let the cat out of the bag on ABC Radio in the Riverina this morning, where recent CSG applications have been made.

"There'll be a six month freeze on the consideration of any other applications right across New South Wales," he said.

"People are uncertain about it, the government wants to make sure that whatever kind of mining occurs that it's done properly, the public are protected, taxpayers are protected and most importantly that the environment is protected as well."

He says the government will use the six months to take another look at the application process for CSG licences, to make sure only legitimate and responsible companies can take part.

The NSW Opposition says the Government's freeze is little more than a quick political fix.

Opposition Leader John Robertson has welcomed the move but is sceptical about the government's motives.

"It's a bit of a stunt. Buys them six months of breathing time in the 12 months in the lead up to an election," he said.

"The fact is if they were serious about it they'd be doing what the Opposition has been calling for - pushing the pause button until we have properly developed peer reviewed science."

CSG exploration licence fee to increase 50-fold

The price of a CSG exploration license is set to increase 50-fold as part of the measures announced today.

The Energy Minister Anthony Roberts has told parliament the fee will increase from $1,000 to $50,000 to ensure only reputable operators apply.

"It was far too easy for speculators and cowboys to be granted petroleum exploration licenses with little regulation and little oversight," he said.

"The former government's practice of handing out licences for an initial application fee of just $1,000 with little scrutiny of the applicant, meant that almost anyone could become the owner of a licence."

Government targets operators

The freeze comes as the Government announces it is targeting CSG operators who have not met the conditions of their licences or have submitted deficient applications.

It revealed it will refuse five existing applications lodged by Grainger Energy in the Riverina and ask Leichhardt Resources to show cause why three licences near Nowra, Moree and Denham should not be cancelled.

Mr Piccoli says the applicant Grainger Energy has not shown it has enough experience to conduct petroleum exploration.

The Director of Grainger Energy, Vaughan Cullen, says he is seeking professional advice in relation to the state government's decision.

Mr Cullen says the company did not have the opportunity to respond to community submissions on the exploration licence applications and was due to meet with the state's Water Commissioner this week.